Department of Justice

Western Union to Pay Scam Victims $586 Million

Our Responds team has had little luck getting people’s money back when they fall for scams like believing they won a foreign lottery, buying a bogus product online, or sending money to someone who claims to be a relative that needs to bail out of jail.

But all might not be lost.

Scam victims could recover some of their losses, thanks to a half-billion dollar announcement that was largely overshadowed by the inauguration last week. It’s a genuine game changer that’s worth digging into now.

Western Union is paying a hefty settlement because the government says the company ignored warning signs and allowed some schemes to happen.

The Federal Trade Commission and the U.S. Department of Justice accused Western Union of turning a blind eye to rampant fraud. Last week, the company settled the case and agreed to forfeit $586 million.

Specifically, the government said Western Union logged more than 260,000 fraud complaints since 2004 in which people lost almost $350 million, yet the company did little to connect the dots to shut down repeat scammers who used its service.

The government accused Western Union of letting the money flow so it could collect its money transfer fees.

In a statement, Western Union said it worked with the FTC to settle the case. The company noted that it has already “increased overall compliance funding by more than 200 percent and now spends approximately $200 million per year on compliance.”

Western Union has pledged to continue beefing up its fraud monitoring – to stop wire transfers that fund scams. 

The FTC says the $586 million Western Union is forfeiting “will be available to compensate the many victims of these frauds.” Victims are encouraged to apply on the justice department's victim website or call the justice department directly.

Just about everyone we have met who has fallen for these scams feels embarrassed about being gullible or naive. Don’t be ashamed. Speak up and apply for compensation. There’s no sense in letting your pride stand in the way of recovering the money a scammer stole.

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